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EU officials have announced they will match the United States' steel tariffs, increasing to double taxes on imports to fifty percent in a action described as "an existential threat" to the sector in the UK.

Unprecedented Crisis for UK Steel Industry

With eighty percent of UK steel shipments going to the European Union, this policy shift creates the British steel sector's most severe crisis, according to the lobby group speaking for the sector.

European Commission Proposals and Regulations

In its plan submitted to the EU legislature this week, the EU executive also proposed slashing the existing quota for tariff-exempt steel and requiring foreign suppliers to declare the origin of steel production to stop Chinese producers diverting exports through third nations.

EU steel sector was on the verge of collapse – we are protecting it so that it can invest, reduce emissions, and regain competitiveness.

Replacement of Existing System

These measures are designed to replace a quota system that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as ineffective. To do nothing could have been "disastrous" for the industry, one EU official stated.

Industry Response and Warnings

Nevertheless, Gareth Stace, head of the trade association British Steel, said EU doubling its tariffs would pose "the most severe challenge the UK steel industry has encountered".

There were calls for the government to "acknowledge the critical necessity to put in place its own measures to defend" the British steel sector – which is affected by a twenty-five percent duty imposed by the US earlier this year – from the risk of millions of tonnes of global steel redirected from US and European markets.

This flood of imports "might prove terminal for many of our remaining steel companies.

Union and Political Calls

Alasdair McDiarmid, representative at steelworkers' union Community, said the proposed changes represented "an existential threat" to UK steel.

Unions and industry leaders called on the UK government to begin talks urgently with the EU on nation-specific tariff exemptions, noting that the United Kingdom was now the EU's primary trading partner.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for several months that their own industry faces being "eliminated" through the increased duties on exports to the US combined with rising energy prices and cheap Chinese competition.

Steel on both sides of the Channel is described as a foundational industry, supplying basic materials in products ranging from building frameworks, renewable energy equipment and railways to dishwashers and kitchenware.

Implementation and Next Steps

These proposals must be agreed by EU nations and the European parliament, with the European Commission president calling on national governments and European parliament members to move quickly in backing the initiative.

Should approval be granted, the EU will reduce its existing tariff-free allowance by forty-seven percent to 18.3 million tons a year, a level previously recorded in 2013. It will impose a 50% tariff on foreign steel exceeding the limit and oblige countries shipping to the EU to state the production origin to prevent circumvention of the sanctions.

Exceptions and International Cooperation

These European nations will not be subject to import limits or tariffs due to their close trading relationship in the European Economic Area, the EU has said.

In addition to these measures, the European Union is seeking a "steel partnership" with the US to ringfence their national industries from overcapacity.

EU needs to act now, and decisively, before all lights go out in significant portions of the EU steel industry and its value chains.